Media Whiz Aquires AuctionAds

In March of 2006 I was talking to Dave (aka Dillsmack) and off-hand I mentioned that I thought it would be cool if we built an advertising platform that allowed users to write their own ads with their own affiliate code. Within a couple days, Dave showed me ShoeMoneyAds. We opened this platform up, and invited as many people as we could while keeping reins on the hardware. Several hundred people used SMA in this incarnation for many months, with very few changes along the way. During that summer we were in San Jose for SES and some people mentioned that we should add an eBay component to SMA. A few days later Dave had fully integrated the eBay API into the SMA platform and we were serving eBay item ads with each user’s own eBay affiliate link. The system worked, but with no caching in place was not very scalable. That fall, at Vegas Pubcon (notice how much gets accomplished at these conferences) one of the great eBay affiliate program employees suggested that we build a sub-affiliate network using the ShoeMoneyAds/eBay technology. We thought that sounded cool but we were still killing it in the ringtone industry and put it on the back burner.

Fast forward to February of this year our revenue from ringtones was down about 300% and it was pretty obvious we needed to find something new to go after. We had plenty of capital built up from our own affiliate marketing so we could try a few things. I really liked the idea of starting my own advertising network using the eBay API. There were some key ingredients missing though that I needed to hash out before approaching Dave to build it:

1) Customer Service – We had never done any customer service. We are developers/marketers not customer service people. In fact we suck at customer service. If we were going to have our own advertising network we needed to figure out how to do customer service.

2) Payments – There is no margin for error when you’re playing with other people’s money. You need an accurate system, and the people in place to manage the payments.

So I talked to a good friend of mine, Patrick Gavin, who has years of experience handling both customer service and mass payouts from Text Link Ads and I pitched him the idea of AuctionAds. He was game to try it so he ran it up the flagpole over at Media Whiz and we went forward.

I then told Dave that I wanted to move forward on AuctionAds and explained the situation with Media Whiz how they were going to be a minority stake holder in AuctionAds and provide customer support and the mass payment knowledge. At this time I felt it was necessary to bring Dave in as an equal partner in AuctionAds. We structured it so that we both owned 50% each of the company that owned the majority of AuctionAds. This means whatever I made he made also. Dave has been loyal and with me for a long time and I knew it was going to be a ton of work for him on this and I wanted him to reap the same rewards as I would get.

Here we are, roughly one year later. AuctionAds has had arguably the biggest launch of any advertising network, ever. Over 25,000 publishers displaying 300+ million AuctionAds ads per day and all in only 4 months after launch. All the success was not without some growing pains though. We basically came to the realization that we had to make a choice: AucitonAds/ShoeMoney Media Group INC could bring in a staff of people, train them and all that (which we had ZERO experience in doing) OR we could sell the company to someone who already has tons of experience in that area and can take AuctionAds to the next level.

With that I am very proud to announce that today we signed a deal we have been working on for the past 15 days or so. Media Whiz is now the sole owner of AuctionAds. This adds another great advertising product to Media Whiz’s arsenal.

So what is in store for Dave and me now? Well, we have several things cooking 😉 Never fear.

Cheyne

Joe

Mike Mothenr

That is a true success story. I have followed the progress of AuctionAds and it was one of those “of course” types of ideas, but at least somebody came up with it and executed it well. Congrats!

July 27, 2007

quadszilla

Congrats – but we want numbers!

July 27, 2007

Mubin

It doesn’t matter how much it was sold for, Im sure mediawhiz got an AWESOME deal, everywhere I go I see ads for with auctions ads. EVERYWHERE I go, even on wblogtools.

Shoe congrats man, im sure it must have looked hectic when you realized just how awesome this thing was. It would have been awesome to see you run this for some more time and see it grow under you. But whatever, I seriously hope you got a coupla million for this, and congrats to Dave as well, Im sure this is a message for all employess if your loyal to your employer they will be cool with you.

Another puff of fresh air in the web 2.0 bubble…

July 27, 2007

AdVolcano

Congrats, that was an amazing turn around!

July 27, 2007

JeffPosaka

Nice work. Congrats! Hope to see you at Pubcon and hear more about what’s in the works.

July 27, 2007

Grivon

Congratulations shoe, your impressions are something adbrite mite even have to worry about!! “So what is in store for Dave and me now?”

Buy the shoemoney jet????? :p congrats again!

July 27, 2007

RightStarter

Congrats Shoe!

What does this mean for AA publishers? Part of the reason I love AA is because you were running it – does Media Whiz plan to stick to your business model?

July 27, 2007

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July 27, 2007

Ari Shohat

Hey, big congrats on this, I am sure plans only get bigger from here on!

July 27, 2007

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July 27, 2007

KeywordDonkey

Congratulation!

July 27, 2007

SonicReducer

Nice work. So I guess now you will be retiring and buying a small carribean island 🙂

July 27, 2007

Cameron Olthuis

Congrats Shoe, that’s so awesome bro. I am so stoked for you and Dave, well deserved for two very hard working/smart guys.

Peace!

July 27, 2007

CPA Affiliates

Congrats shoe! I know you are glad to build it up and pass it on to capable hands now on to the next project!

July 27, 2007

John

Awww man, I guess this means DDN won’t be doing the customer service on the forums anymore…I loved reading his replies when you guys first launched. Smack talk/customer service, it was great.

Jonathan

Definitely cool that I got to meet both of you, David and Jeremy, in the TLA office weeks back.

Glad to have you all on board with Mediawhiz now 🙂

July 27, 2007

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July 27, 2007

Tranix

100K is my guess 🙂

Congrats guys

July 27, 2007

Paul.

This had to be a couple million plus deal. The earing potential of AuctionAds is huge.

Kind of sad about the sale, but whatever you gotta do.

July 27, 2007

Paul.

I doubt they need VC when they can easily get it done themselves.

July 27, 2007

Rob

“I then told Dave that I wanted to move forward on AuctionAds and explained the situation with Media Whiz how they were going to be a minority stake holder in AuctionAds and provide customer support and the mass payment knowledge.”

So given that AuctionAds had no customer support, does this mean it’s safe to say text-link-ads has none either and I shouldn’t try them?

July 27, 2007

mahdi yusuf

congrats!! 😀

July 27, 2007

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July 28, 2007

Funny t-shirts

Congrats on the success, guys. It’s kind of a shame to have to let it go just as it was gaining major growth but I’m sure your bank account isn’t complaining 😉

July 28, 2007

Icheb

“our revenue from ringtones was down about 300%”

You DO realize that if the revenue were down 300% you would be paying someone 2 times the amount of revenue that you were earning before?

July 28, 2007

Fable

tom huveners

yea, nice job, but we want numbers 😀
and what’s your next project 😀

July 28, 2007

myspace-comments

Wow, congrats! It is amazing how fast auctionads grew but also easy to see why. Such a simple idea executed so well and you have the start of an awesome service/company. Although it seems sad that you won’t be running it anymore it’s also exciting knowing that you may have more time now for some other really cool service or product that you can amaze us all with heheh. Keep it up shoe and bring it on!

July 28, 2007

SomeGuy

Your ringtone business went down 300%? Did you mean 30%? Nothing can go down more than 100% 🙂

July 28, 2007

Ali

Congratulations man, I have yet to sign up with AA though. Will do as soon as I get myself structured up.

gsyi

Pedro Sttau

Very surprising indeed. Congratulations. Jeremy I never really did see you as a “Maintenance” guy.

July 28, 2007

Jonathan Volk

It matters to me. I want some numbers too!!! 😀

July 28, 2007

the buxr widget

Please please.. Throw out a ballpark number? Six or Seven figures… come on Shoe! 🙂

July 28, 2007

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July 28, 2007

Pingback: Media Whiz Aquires AuctionAds : Opportunities for Life

July 28, 2007

Stephen Ralph

Great success story for you both. God bless the American dream. =)

July 28, 2007

Study Guide

So… what will this imply for the existing users?

July 28, 2007

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July 28, 2007

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July 28, 2007

Travel Notebook

six figures? There is no way he sold this website for 6 figures.

July 28, 2007

Eric

TechCrunch gets to break all the good news. Looking forward to the next big ShoeProject.

July 28, 2007

Quais

Congrats to both of you!! Great work!! I hope that the acquisition is also a good thing for the users of AuctionAds. And yes an indication of a price range for the deal would be nice.

July 28, 2007

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July 28, 2007

cooliojones

I want to sell something for $1 billion too! 😀

July 28, 2007

Increase WebSite Traffic

also very interested to see if numbers are released here 🙂

July 29, 2007

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July 29, 2007

Michael Fultz

I like to hear success stories! Keep up the good work!!

July 29, 2007

Dave

unless your are loosing money….

July 29, 2007

Don@AffiliateWatcher

I can’t say that I’m surprised. It seemed lately that AuctionAds was consuming ya’ll. I figured something major was going to break (either you or the equipment 😉 ) or that you’d sell it. Glad to see you found a company to pony up the $$$.

Pogung177

Shoe was created brilian business masterpiece. By developed a AuctionAds, you are not just a popular among millions of affiliate marketer. I guest in the next day you’ll create new inovation which people never create.

adsense

tarsier

a job well done. hey, you must be swimming on money by now. haha. truly, those who work hard and smart will be rewarded.

December 2, 2007

Life is Colourful

And can someone tell me, why AuctionAds stopped working and never paid out for the remaining money in the accounts? I am still supposed to be paid for the last payment since the month they screwed everything up.